Posted at 6:21 PM (CST) by & filed under General Editorial.

Dear CIGAs,

Only Gold can provide the required protection.

  1. The demise of the US dollar is inherent in its faux strength caused by international debt money flows.
  2. Hyperinflation is now set in cement. Citi last week, AGM today – all will come home to roust by economic law.

At .8900 on the USDX the argument that China cannot sell dollar or dollar denominated instruments starts to dissolve.

This then is true for every other nation whose central bank has expressed a desire to diversify their currency holdings.

This same argument applies to US treasury instruments.

The fundamentals of the US dollar are horrendous, exceeding the problems of the euro by orders of magnitude.

Hyperinflation is the natural outcome of the unprecedented, over the top, mad, mad bailouts of all the near and dear politically.

What Effect Will Hyperinflation Have?
September 22, 2008
Avery Goodman

(Excerpts From Article)

“For America, like 1920s Germany, the hyperinflationary trigger will not come from within the nation. It will come from outside. Eventually, China, Japan, and/or some other nation, will see the endlessly increasing American deficit spending as a threat to the viability of the U.S. dollar. In response, they will reduce their purchases of treasury bills. This will bring America to her knees. Indeed, there is already talk, in China, about the danger of keeping Chinese foreign reserves predominantly in the form of U.S. dollar denominated treasury bills and bonds. The Chinese are talking about diversifying away from the U.S. dollar. This will happen, eventually, no matter what we do. It is not a matter of “if”, but, rather, of when.”

“At minimum, the U.S. dollar will depreciate by the amount by which the Federal balance sheet is corrupted by the toxic mortgage paper. Most frightening is the prospect of giving Hank Paulson, the prior Chairman of Goldman Sachs, one of the key creators of the toxic mortgage instruments that have caused the credit crisis, unlimited discretion in doling out $700 billion in bailouts, without any possibility of judicial review. Doing that assures that the money is used in the most inefficient and nepotistic manner. It will bring us deeper into hyperinflation.

We can rationally expect that the US dollar will lose about 75% of its value, within 2-3 years. Cash in the form of government and/or corporate bonds, money in CDs and other bank accounts, will be hit the hardest. “

Full Article…

Defining the Components of a Hyperinflationary Great Depression
Deflation, Inflation and Hyperinflation.

Inflation generally is defined in terms of a rise in general prices due to an increase in the amount of money in circulation. The inflation/deflation issues defined and discussed here are as applied to goods and services, not to the pricing of financial assets.

In terms of hyperinflation, there have been a variety of definitions used over time. The circumstance envisioned ahead is not one of double- or triple- digit annual inflation, but more along the lines of seven- to 10-digit inflation seen in other circumstances during the last century. Under such circumstances, the currency in question becomes worthless, as seen in Germany (Weimar Republic) in the early 1920s, in Hungary after World War II and in the dismembered Yugoslavia of the early 1990s.

The historical culprit generally has been the use of fiat currencies — currencies with no asset backing such as gold — and the resulting massive printing of currency that the issuing authority needed to support its system, when it did not have the ability, otherwise, to raise enough money for its perceived needs, through taxes or other means.

Foster (see recommended further reading at the end of this issue) details the history of fiat paper currencies from 11th century Szechwan, China, to date, and their consistent collapses, time-after-time, due to what appears to be the inevitable, irresistible urge of issuing authorities to print too much of a good thing. The United States is no exception, already having obligated itself to liabilities well beyond its ability ever to pay off.

Here are the definitions:

Deflation. A decrease in the prices of goods and services, usually tied to a contraction of money in circulation.

Inflation. An increase in the prices of goods and services, usually tied to an increase of money in circulation.

Hyperinflation: Extreme inflation, minimally in excess of four-digit annual percent change, where the involved currency becomes worthless. A fairly crude definition of hyperinflation is a circumstance, where, due to extremely rapid price increases, the largest pre-hyperinflation bank note ($100 bill in the United States) becomes worth more as functional toilet paper/tissue than as currency.

More…

Posted at 6:07 PM (CST) by & filed under Guild Investment.

Dear CIGAs,

Washington’s confusion and ineptitude in addressing the U.S. banking and economic problems has not given the markets comfort (more on that below).   The problem is complex, but there are people in the world who understand the economics and have ideas for addressing the problem. 

Pete Peterson, the former Commerce Secretary and founder of Blackstone Group was interviewed in the Financial Times last week.  He offers the reader an excellent big picture view of how we got here, and what tough medicine is required.

The article can be found at: Financial Times

ZOMBIE BANKS

Below is a short article in the Wall Street Journal that highlights the risk of not doing enough to recapitalize the banks and clean up their balance sheets of bad assets.  Half measures are likely to prolong the economic malaise as it postpones the eventual cleansing that is needed.

The Curse of the Zombie Banks
Wall Street Journal-February 26, 2009.

The Federal Reserve’s lending programs have saved the financial system’s life. They also could be making its life miserable.

That is one takeaway from a research paper by Douglas Diamond and Raghuram Rajan of the University of Chicago, published online this week by the National Bureau of Economic Research.

As fresh data from the Fed will show Thursday, the central bank’s balance sheet has more than doubled since August 2007. Some Fed programs have helped loosen the credit logjam, including the Term Securities Lending Facility, which lets banks borrow money using mortgage-backed securities and other hard-to-sell assets as collateral.

But the Fed also might have kept alive weak banks and other institutions having balance sheets stuffed with toxic assets, the two professors suggest. The weak are afraid to sell such assets because doing so would wipe them out, while strong institutions don’t want to buy because they are holding out for a fire sale.

Without a lifeline from the Fed, the weaklings could have died, putting the assets in stronger hands at cheaper prices.

"Central bank intervention to lend against all manner of collateral may not be an unmitigated blessing," Messrs. Diamond and Rajan wrote.

The consumer-loan-focused Term Asset-Backed Securities Loan Facility, which will roll out "very soon," Fed Chairman Ben Bernanke said Wednesday, could raise similar problems if consumer credit quality keeps withering.

Of course, doing nothing to help credit would have been catastrophic. But "zombie" banks are a reminder that clearing one logjam can make another one even worse.

REMINDER, FOR A LIMITED TIME…

For no charge, as a service to our readers, we will be happy to examine your current investment portfolio, and explain how we might restructure it to meet your needs for income and capital appreciation in the current environment.  In recent weeks, we have received a number of requests to review investment portfolios and have been responding to them as time permits.  In order to provide a more meaningful evaluation of your portfolio, we will need additional information about your overall financial picture.  Please give us a call if we can help you in this regard.  

Thanks for listening.

Monty Guild and Tony Danaher
www.GuildInvestment.com

Posted at 3:57 PM (CST) by & filed under David Duval, Trader Dan Norcini.

Dear CIGAs,

Talk about a roller coaster ride in the gold market – up strongly overnight, down during the early New York session and then back up again after noon in New York before settling slightly lower on the day. Gold was caught in a crossfire between safe haven buying and a huge, and I do mean HUGE, dumping of commodities across the board. The only commodity that I could see that was up was natural gas and that was mainly due to the cold weather snap currently hitting the Northeast – everything else was smacked and smacked hard as funds unloaded everything as the US equity markets imploded.

The gold shares as indicated by the HUI and the XAU were down 20 points and 10 points respectively at one point early in the session before both indices cut their losses in half by late in the morning. They are currently weaker but well off their early lows as I write this.

Bonds once again received the usual lemming like response to plunging stocks after going through a brief period last week in which they were moving lower alongside of equities. It seems as if old habits die hard. Those buying bonds are going to be taught a painful lesson as the upcoming massive supply surge will continue to weigh on Treasuries, particularly the long end.  For today however, the bond bulls are in charge as they squeeze out all the shorts and produce a sharp, short-covering rally.

The equities are now trading at 12 year lows after violating key support levels in the overnight trading in the futures pit. That brought in more selling during the course of normal trading hours which utterly mauled them.  Investors are reacting to the news surrounding AIG and the inept manner in which the feds are handling this entire financial debacle. I have said it before and will say it again – the market has lost all confidence in the new administration as the policies they are following are a recipe for economic disaster. Soaring , out of control, indeed, wild-eyed spending, talk of elimination of home mortgage interest deductions, daily bashing of producers and achievers, tax hikes, confusing statements from various policy makers and officials, all have led to an attitude that looks to be approaching total despair. I know of several small business owners who have told me categorically that there is no way in hell that they are going to hire anyone new because they do not trust what the feds are going to do next. You are talking about the chief  source of new job creation in this nation and those folks have had enough already of this new administration after not even being in power for two months! Hold onto your hats – it is just going to get worse if the past month is any indication of what we can expect.

Remember, markets attempt to put emotions aside when evaluating policy and act accordingly and they have voted with their feet.  As such, I can easily see a breach of major support in the S&P of 700 and a fast plunge in the Dow to near 6,000 at the current rate of selling. What has to wonder exactly what news might arise that can stem the loss of confidence and arrest the growing attitude of despair. I should also note one thing – shares of a certain handgun manufacturer are trading strongly higher. Looks to me like many Americans are “getting it”.

Back to gold since it has been affected by the movement in the equity markets and will continue to be for the foreseeable future. The selling originated from fund sources whose computer selling programs indiscriminately dumped a wide basket of commodities across the board. That selling is quite large as can be seen by the extent of the price moves in other commodity markets. Sugar was slammed alongside of crude oil which then hit corn which spread to the bean pit. Wheat was crushed by the rally in the dollar which looks to be embarking on a bull run if it can push through very strong resistance that lies up near the 92 level on the USDX. The Dollar rally will not last but for now, it is wining the safe haven flow race merely by default because it is so bad everywhere else. I find it ironic that the source of this economic contagion, most notably the US, is not somehow perceived to be the best place to shelter one’s wealth. Scary isn’t it?

While not exactly anything to get excited about, I view gold’s ability to withstand the commodity-wide selling onslaught as impressive. It is hard to understate the extent of the selling that hit these markets today. To see buyers be able to absorb all that selling and push the market high enough to actually get it into positive territory is a notable achievement even if the bulls failed to secure a positive pit session close. Buyers of physical gold take note – if you want to acquire the physical metal do it when prices are down.

I am watching the price of corn and am wondering what farmers are going to do this season after watching the market push prices down so low. Imagine having to make a decision that affects your family’s income when you wonder if you can put a crop in the ground and actually make enough off of that crop, assuming you can bring one to maturity, to recoup your costs and even recompense you somewhat for all the labor involved. Folks are used to eating but had better not take the American farmer for granted.

One last thing – platinum has so far been able to maintain its footing above the $1,000 mark –again, fairly impressive given the severity of the economic news and its industrial metal role. It is evident that a goodly portion of the platinum buying is coming from safe haven flows.

Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini

clip_image001

Posted at 11:19 PM (CST) by & filed under In The News.

BAILOUT FEVER

Once it starts it cannot be ended. Bailout one and you will have to bail out thousands. Hyperinflation cannot be avoided. Protect yourself with gold immediately.

AIG was Bear Stearns’ wastepaper basket for OTC derivatives.

The too small to consider will all be the property of the too big to fail as very few mega financial entities take birth.

AIG May Get $30 Billion in Additional U.S. Capital
By Hugh Son and Rebecca Christie

March 1 (Bloomberg) — American International Group Inc., the insurer deemed too important to fail, may get a commitment for as much as $30 billion in new government capital after a record quarterly loss, said two people familiar with the matter.

The insurer may also be allowed to make lower payments on government loans, said the people, who declined to be identified because there was no public announcement. New York-based AIG may forfeit part of stakes in its two largest non-U.S. life insurance divisions to lower the firm’s debt, the people said.

AIG, first saved from collapse in September with a package that grew to $150 billion, had to restructure its bailout after failing to sell enough units to repay the U.S. Firms including banks relied on AIG to back more than $300 billion of assets through derivative contracts as of Sept. 30, making the insurer a “systematically significant failing institution” that has to be propped up, according to the Treasury.

“The government has accepted all the downside with little chance of upside,” saidPhillip Phan, professor of management at the Johns Hopkins Carey Business School in Baltimore. “They are trying to protect the global financial system from a complete meltdown.”

AIG, which agreed in September to turn over an 80 percent stake to the government, is set to announce a fourth-quarter loss of about $60 billion tomorrow, according to three people familiar with the matter. The company’s board was scheduled to meet today to vote on the revised bailout, according to two other people familiar with the matter.

More…

Jim Sinclair’s Commentary

Are you still dealing with internet financial sites?

That is the exact opposite of my advice to distance yourself from financial agents.

A gold certificate is not gold. Paper gold is not gold.

"As we can see the growth of traffic begins from the time when the first notifications appeared. The users started to withdraw money from their accounts that could also caused the drop in exchangerates. As you remember the similar situation was in the beginning of e-gold crisis. That time the exchange rate of e-gold has reached 50-60%, and those who managed to get rid of e-gold currencywere in the money. So, we can say that today’s liquidity of LR is similar to the one e-gold had in the very beginning of its crisis."

Liberty Reserve is down for maintenance: users are in panic, what’s going on?
March 1, 2009 – 11:08pm | author: ayny

These days something really strange happens to one of the most popular payment processors Liberty Reserve. Being created several years ago this online payment system has become ‘number one’ for theonline investment industry. There is hardly any investment project that doesn’t use LR as a payment gateway, and the latest event around it became a real nightmare for them. Liberty Reserve is stable for two weeks.

Everything started in the second half of February. The site of the company became unavailable on February 18 without any preliminary notifications however in few hours everything was fixed. The next outage happened on February 21 though this time LR was posted a notice in their blog:

“We are currently installing updates that became available just recently for our routers. This procedure should approximately take not more than 5-9 hours, which also includes the restarting of allhardware and testing. We sincerely apologize for this unplanned event, but keeping our hardware up to date is one of the highest priorities as it assures the most secure operation.”

When the site came online some users faced the problems with login as system didn’t accept the passwords. Later on February 22 LR has posted another announcement: “We are going through final steps of testing of all updates implemented earlier. During this stage some of you may not be able to temporarily login to your account, while changes are still being tested and analyzed for maximum performance…”

More…

Jim Sinclair’s Commentary

How can Israel live with this development?

Iran’s uranium ‘enough for bomb’

Iran has enough nuclear material to build a bomb, the United States’ most senior military commander has said.

"We think they do, quite frankly," Adm Mike Mullen, chairman of the US Joint Chiefs of Staff, told CNN.

"And Iran having a nuclear weapon, I’ve believed for a long time, is a very, very bad outcome for the region and for the world," he said.

Iran says its nuclear programme is entirely peaceful, but the West suspects it is seeking nuclear weapons.

‘One bomb’ possible

A report issued by the International Atomic Energy Agency (IAEA) two weeks ago said Tehran had built up a stockpile of fissile nuclear material. This raised concerns in the West that Iran might have understated by one-third how much uranium it has enriched.

The IAEA report showed a major increase in Iran’s reported stockpile of low-enriched uranium (LEU) since November to 1,010 kg.

Some physicists believe this stockpile is enough to be converted into enough highly enriched uranium to build one bomb.

More…

Jim Sinclair’s Commentary

Forewarned is forearmed

Be careful of internet gold offerings regardless of appearances. They are ALL frauds.

All that glitters is not gold
STANLEY SENEVIRATNE Kurunegala north group corr.

A five member gang operating islandwide were taken into custody by Habarana police while attempting to sell a stock of fake gold nuggets early yesterday.

The modus operandi of the gang had been to sell the fake gold nuggets to a wealthy merchant claiming they had discovered the treasure.

Inquiries revealed that the suspects had been carrying on this racket over a long period and had employed over 180 others as their agents and sub agents in many parts of the country.

Police said the brain behind the racket was among the suspects already in custody.

Information also revealed that the suspects had cheated several leading businessmen in Kurunegala, Dambulla, Pelmadulla, Ratnapura, Kanthale, Anuradhapura, Polonnaruwa, Hingurakgoda, Mahiyangana and Colombo.

More…

 

Jim Sinclair’s Commentary

Pakistan moving towards center stage.

Obama team lays out new Afghan-Pakistan approach

WASHINGTON (AFP) — After setting a deadline to pull US forces from Iraq, President Barack Obama is shifting gears quickly to Afghanistan and Pakistan as he lays out a broad, regional approach to fighting extremism.

The Obama administration held three days of talks last week with the foreign ministers of Afghanistan and Pakistan and said it would turn it into a regular dialogue to chart a new course in the "war on terror."

Obama has vowed to put a top priority on bringing stability to the lawless and rugged terrain between the South Asian neighbors — the home base for Taliban and Al-Qaeda militants including, most presume, Osama bin Laden.

Obama, who Friday announced a timeline to end the Iraq mission, is sending 17,000 more US troops to Afghanistan. But he said the United States needed an effort broader than just hunting and killing militants.

"We’ve been thinking very militarily, but we haven’t been as effective in thinking diplomatically, we haven’t been thinking effectively around the development side of the equation," Obama said Friday on PBS television.

"Obviously, we haven’t been thinking regionally, recognizing that Afghanistan is actually an Afghanistan-Pakistan problem, because right now the militants… are often times coming over the border from Pakistan," he said.

All three sides hailed the openness of the Washington talks, with Pakistani Foreign Minister Shah Mehmood Qureshi saying that the new administration compared with president George W. Bush’s is "really willing to listen to us."

More…

 

Jim Sinclair’s Commentary

Here comes the shock of people’s lifetime. You can not contribute what you do not have. The valuation of Pension Assets is another sick cartoon.

Here comes more bailouts via a government Pension Guarantee scheme. Hyperinflation cannot be avoided.

Protect yourselves.

Pension bombs going off

By: Paul Merrion March 02, 2009

Exploding pension fund shortfalls are blowing billion-dollar holes in the balance sheets of some of the Chicago area’s biggest companies, forcing them to make huge contributions to retirement plans at a time when cash flow and credit are already under stress.

Boeing Co.’s shareholder equity is now $1.2 billion in the hole thanks to an $8.4-billion gap between its pension assets and the projected cost of its obligations for 2008. At the end of 2007, Boeing had a $4.7-billion pension surplus. If its investments don’t turn around, the Chicago-based aerospace giant will have to quadruple annual contributions to its plan to about $2 billion by 2011.

Stock market losses also pounded pension funds at Abbott Laboratories Inc., Caterpillar Inc. and Exelon Corp., with others sure to emerge as companies file their annual financial reports with the Securities and Exchange Commission in coming weeks.

More…

Jim Sinclair’s Commentary

Armed forces prepare to make War on British citizens in Britain.

MI5 ALERT ON BANK RIOTS
By Geraint Jones
March 1,2009

TOP secret contingency plans have been drawn up to counter the threat posed by a “summer of discontent” in Britain.

The “double-whammy” of the worst economic crisis in living memory and a motley crew of political extremists determined to stir up civil disorder has led to the extraordinary step of the Army being put on standby.

MI5 and Special Branch are targeting activists they fear could inflame anger over job losses and payouts to failed

More…

Posted at 10:30 AM (CST) by & filed under In The News.

Wall Street Economics

Young Chuck moved to Texas and bought a donkey from a farmer for $100.
The farmer agreed to deliver the donkey the next day.
The next day the farmer drove up and said, ‘Sorry Chuck, but I have some bad news, the donkey died.’
Chuck replied, ‘Well, then just give me my money back.’
The farmer said, ‘Can’t do that. I went and spent it already.’
Chuck  said, ‘OK, then, just bring me the dead donkey.’
The farmer asked, ‘What ya gonna do with a dead donkey?
Chuck said, ‘I’m going to raffle him off.’
The farmer said ‘You can’t raffle off a dead donkey!’
Chuck said, ‘Sure I can. Watch me. I just won’t tell anybody he’s dead.’
A month later, the farmer met up with Chuck and asked, ‘What happened with that dead donkey?’
Chuck said, ‘I raffled him off. I sold 500 tickets at two dollars apiece and made a profit of $898.00.’
The farmer said, ‘Didn’t anyone complain?’
Chuck said, ‘Just the guy who won. So I gave him his two dollars back.’
Chuck now works for Morgan Stanley in their OTC Default Derivative Department.

Jim Sinclair’s Commentary

$42 billion in the hole according to recent reports and now a drought.

Do you think Mother Nature might be unhappy with how things are being run?

California declares drought emergency
By Peter Henderson

SAN FRANCISCO (Reuters) – California Governor Arnold Schwarzenegger on Friday declared a state emergency due to drought and said he would consider mandatory water rationing in the face of nearly $3 billion in economic losses from below-normal rainfall this year.

As many as 95,000 agricultural jobs will be lost, communities will be devastated and some growers in the most economically productive farm state simply are not able to plant, state officials said, calling the current drought the most expensive ever.

Schwarzenegger, eager to build controversial dams as well as more widely backed water recycling programs, called on cities to cut back water use or face the first ever mandatory state restrictions as soon as the end of the month.

"California faces its third consecutive year of drought and we must prepare for the worst — a fourth, fifth or even sixth year of drought," Schwarzenegger said in a statement, adding that recent storms were not enough to save the state.

More…

Jim Sinclair’s Commentary

That is not FAIR

Senate bars FCC from revisiting Fairness Doctrine
By JIM ABRAMS – 1 day ago

WASHINGTON (AP) — The Senate has barred federal regulators from reviving a policy, abandoned two decades ago, that required balanced coverage of issues on public airwaves.

The Senate vote on the so-called Fairness Doctrine was in part a response to conservative radio talk show hosts who feared that Democrats would try to revive the policy to ensure liberal opinions got equal time.

The Federal Communications Commission implemented the doctrine in 1949, but stopped enforcing it in 1987 after deciding new sources of information and programming made it unnecessary.

President Barack Obama says he has no intention of reimposing the doctrine, but Republicans, led by Sen. Jim DeMint, R-S.C., say they still need a guarantee the government would not establish new quotas or guidelines on programming.

More…

Jim Sinclair’s Commentary

The following quote from this article on Pakistan sums up the situation: "Their country is in mortal danger." If Pakistan is in mortal danger then so is the entire Middle East. If the Middle East is in mortal danger then so is the West.

Playing With Fire in Pakistan
Published: February 27, 2009

Almost no one wants to say it out loud. But between the threats from extremists, an unraveling economy, battling civilian leaders and tensions with its nuclear rival India, Pakistan is edging ever closer to the abyss.

In a report this week, The Atlantic Council warned that Pakistan’s stability is imperiled and that the time to change course is fast running out. That would be quite enough for any government to deal with. Then on Wednesday, Pakistan’s Supreme Court added new fuel upholding a ruling barring opposition leader Nawaz Sharif — a former prime minister — and his brother from holding elected office. That touched off protests across Punjab Province, the Sharifs’ power base and Pakistan’s richest and politically most important province.

The Sharifs charge that the Supreme Court is a tool of President Asif Ali Zardari. They are backing anti-government lawyers who have long campaigned for the reinstatement of the country’s former top judge who was dismissed by former Gen. Pervez Musharraf in 2007.

We don’t know if Mr. Zardari orchestrated this ruling, as Nawaz Sharif and many others have charged. (The government actually argued Mr. Sharif’s side in the case, which stems from an earlier politically motivated criminal conviction.) We do know the danger of letting this situation get out of control.

When Mr. Zardari became president, he pledged to unite the country. He has not. Like Mr. Zardari, Mr. Sharif is a flawed leader and no doubt is manipulating the combustible court ruling for personal political gain.

More…

Jim Sinclair’s Commentary

Once you open this Pandora’s Box of Bailouts you cannot close it.

Protect yourself with gold! The US dollar is not strong. The non-euro, European currency units are being raided. The default derivative index is being used by Vlad the Impaler against the countries represented by the currency units being raided by the Vlads.

Citigroup’s Third U.S. Rescue May Not Be Its Last, Analysts Say
By Christine Harper

Feb. 28 (Bloomberg) — The U.S. government’s third attempt to help rescue Citigroup Inc. won’t stanch the company’s losses, which will continue to swell and may lead the bank to require more money in coming months, analysts said.

Yesterday’s action didn’t furnish the New York-based bank with new money, although it cuts expenses by eliminating dividends on preferred stock. Instead, it converted preferred shares into common equity, which absorbs the first hit in the event of further losses, at an above-market-value price of $3.25. The stock, which has fallen 78 percent since the beginning of the year, closed in New York trading yesterday at $1.50, its lowest since November 1990.

Vikram Pandit, 52, Citigroup’s chief executive officer, told investors yesterday that increasing tangible common equity to as much as $81 billion from $29.7 billion should “take the confidence issues off the table,” regarding the company’s ability to absorb losses. Still, Citigroup, which lost $27.7 billion in 2008, is expected to lose $1.24 billion in the first six months of 2009, according to the average of analysts’ estimates compiled by Bloomberg.

“There’s no difference here,” said Christopher Whalen, co- founder of Institutional Risk Analytics, a Torrance, California- based risk-advisory firm. “It won’t fix revenue, and you’re still going to see loss rates.”

More…

Jim Sinclair’s Commentary

The worse it gets the more they will spend, ad infinitum.

Protect yourself with gold. There is nothing else.

Sharper Downturn Clouds Obama Spending Plans
By PETER S. GOODMAN
Published: February 27, 2009

The economy is spiraling down at an accelerating pace, threatening to undermine the Obama administration’s spending plans, which anticipate vigorous rates of growth in years to come.

A sense of disconnect between the projections by the White House and the grim realities of everyday American life was enhanced on Friday, as the Commerce Department gave a harsher assessment for the last three months of 2008. In place of an initial estimate that the economy contracted at an annualized rate of 3.8 percent — already abysmal — the government said that the pace of decline was actually 6.2 percent, making it the worst quarter since 1982.

The fortunes of the American economy have grown so alarming and the pace of the decline so swift that economists are now straining to describe where events are headed, dusting off a word that has not been invoked since the 1940s: depression.

Economists are not making comparisons with the Great Depression of the 1930s, when the unemployment rate reached 25 percent. Current conditions are not even as poor as during the twin recessions of the 1980s, when unemployment exceeded 10 percent, though many experts assert this downturn is on track to be significantly worse.

More…

Jim Sinclair’s Commentary

I heard he was just trying to make a withdrawal from his own account as the FDIC took over.

Church deacon, soccer coach, suspected bank robber
February 27th, 2009
By Steve Brusk

(CNN) — Bruce Windsor is known as many things: church deacon, soccer coach, father of four. But facing potential financial problems, he’s now known as something else: suspected bank robber.

Police say the 43-year-old owner of a real estate company walked into the Carolina First Bank in Greenville, South Carolina, late Thursday with a mask and a handgun.

In court documents filed Friday, police said he forced two bank employees into an office at gunpoint and demanded money. Police arrived minutes later with the suspect still inside, touching off a tense 90-minute standoff before he released the hostages and surrendered.

More…

Posted at 10:00 AM (CST) by & filed under Jim's Mailbox.

Dear CIGAs,

Here are some of the 450+ great people that made it to the CIGA meeting in Toronto last week.

Thank you all for the warm welcome you showed me. If you have any more pictures, I would love to see them.

Jim

photo

Dear Jim,

You wrote:
“As long as we do not see a reinstatement of the "Uptick" rule and regulatory demand that this rule be attended to, as well as arrests for naked shorting, the inviting conclusion is that the activities of the 666 beasts are acting at the behest of ruling government, mopping up all the money on the planet still available.”

I spent the last week calling my Congressman and trying to get an answer on the progress of bill H.R. 302 – the restoration of the uptick rule. I also made calls to Congressman Gary Ackerman’s office (the bill’s author), and also to the House Financial Services committee (chaired by that genius, Barney Frank), the committee the bill is referred to. The experience was akin to talking to brain dead aliens. NO ONE in government knows:

1) The status of the bill
2) The implications of the passing of such a bill
3) The implications of NOT passing such a bill

If you ever want to feel the sensation of taxation without representation, make an attempt to contact your congressman’s office. I would suggest polishing off 2 or 3 of your favorite cocktails before attempting such a futile act, though. In the future, I plan to have a bottle of 7 star Metaxa by my side.

Do you think I would ever buy a non-gold or silver related asset after talking to them?  Quite the contrary – why should I participate in the stock market when our so called ‘leaders’ won’t make even the tiniest attempt to defend the sanctity of it? The Dow can go to zero for all I care – aside from gold, silver and precious metal mining shares, I won’t be participating in any of it.

CIGA Anthony

P.S. Here is the progress of the bill, which was introduced on Jan. 8th.  As you can see, this is not going to be happening any time soon.

http://www.govtrack.us/congress/bill.xpd?bill=h111-302